Real estate “big cheeses” lost big assets on stock market

VietNamNet Bridge – Though still accounting for 20 percent of the number of the members in the top 500 stock millionaires, most of the representatives from the real estate sector saw the big steps back in their fortunes.

Though having experienced a stormy year in 2011, the real estate sector is still considered the most profitable business field which can help investors get rich rapidly. This is reflected in the list of the stock millionaires in 2011 which has been released by VnExpress with the cooperation of VN Direct Securities Company.

The 2010’s list of 100 stock millionaires included the names of 40 big guys from the real estate market. Meanwhile, the figure was just 30 in the 2011’s list. However, real estate remains the sector which has the highest number of representatives in the 2011’s list.

In the list of 500 richest stock millionaires, one can see 120 names from the real estate sector, which accounts for 20 percent. They have the total stock assets of 35,800 billion dong, or 55.5 percent of the values of the shares of the top 500’s members.

The advantages of the real estate sector can also be seen in the fact that three richest people on the stock market – Pham Nhat Vuong, Doan Nguyen Duc and Pham Thu Huong (Vuong’s wife) are the real estate developers.

Vuong is now the President of Vingroup, while Doan Nguyen Duc is the President of Hoang Anh Gia Lai.

Of course, even the rich real estate developers also had to meet a lot of difficulties in 2011, when the market was gloomy. There was once rumor that Vingroup was seriously thirsty for capital and it could not implement some projects. However, Vingroup’s shares still increased by 10 percent in 2011 in prices, which helped the total assets of Vuong and his wife increase by one trillion dong in comparison with late 2010.

Though having a satisfactory year 2011 (the net profit in the first nine months of Hoang Anh Gia Lai was 900 billion dong, the same as the previous year’s period), President of Hoang Anh Gia Lai Doan Nguyen Duc still saw his assets drop dramatically by 7500 billion dong, the sharpest asset value decrease of the year.

The loss of the stock assets has been mainly explained by the fact that the confidence of investors on the real estate market. Meanwhile, real estate brings 60 percent of the total revenue of Hoang Anh Gia Lai Group.

Duc himself said he has to think about that and he is considering gradually reducing the proportion of the real estate sector in the total revenue to 20-25 percent in the next three years.

The case of Hoang Anh Gia Lai’s President represents many other real estate businessmen. Their assets also depreciated on the market in 2011, the year which was considered the worst in the last many years.

The latest report by the Ministry of Construction submitted to the Prime Minister showed that the number of transactions dropped sharply in 2011, especially in the third quarter of the year. The numbers of successful transactions in Hanoi and HCM City were 500 and 900, respectively in the third quarter. Meanwhile, the figures were 1400 and 2700 in the first six months of the year.

The ministry has also reported that the price of apartments has decreased by 3-8 percent on average, while the price of landed property by 10-20 percent. The sharp price falls have led to the fact that many real estate enterprises cannot fulfill their business plans, which has discouraged shareholders.

Starting the year 2011 with the targeted profit of 270 billion dong, but the Phat Dat Real Estate Company incurred loss right in the first quarter, and it only got the modest profit of 1.5 billion dong of after the first nine months. This then made the PDR price drop by 43 percent and Nguyen Van Dat, the owner of Phat Dat, lost ½ of the stock assets.